February 09, 2015
Analyzing Pro Forma Statements
The Home Depot is the world’s largest home improvement retailer. The tagline for The Home Depot is “More savings more doing that’s the power of The Home Depot.” The catchy and recognizable tagline can be heard on nearly every TV and radio station in the United States. The Home Depot realizes that in order to maintain its title as the world’s largest home improvement retailer the company will need more than its catchy tagline. Therefore, The Home Depot has decided to extend the time in which small household appliances are available to its customers.
Analysis of Pro Forma Data The Home Depot does not usually sell small house appliances like coffee pots, toasters, mini convection ovens, blenders, and irons through the year. The mentioned small appliances were only sold during the Christmas season. The Home Depot has decided to extend the time frame in which small appliances could be purchased. In 2014, The Home Depot sold the small appliances from the Christmas season until March 2015. The extension of the availability of the small appliances increased sales revenue by 3.0%. The increase in revenue prompted The Home Depot to employ the idea for the 2015 Christmas season until March 2016. There was an increase in revenue of 4.0% for 2016. The same model was used for the Christmas season of 2016 to March 2017, and again there was an increase in annual sales, 5.0%. The Home Depot decided that since sales revenues were increasing each year with the extension of having small appliances available to its customers that the store would sell small appliance year round. So in 2017 The Depot made the decision to sell small appliances all year. There was an increase in sales for 2018 of 10.0%. Sales revenue increased 15.0% in 2019, which proved to be the most successful year.
The decision to extend the availability of small household